Sable Offshore (SOC) Surges 22.9% on Pipeline Approval Breakthrough – Is This the Catalyst for a New Bull Run?

Summary
• Sable Offshore (SOC) rockets 22.89% intraday to $9.34, defying a 52-week low of $3.72
• Federal pipeline restart approval clears state regulatory hurdles, unlocking $21.20 analyst price target
• Options frenzy: 2026-01-02 $9.5 call options surge 281.63% in turnover

The oil and gas sector is abuzz as Sable Offshore’s stock erupts on the back of a regulatory breakthrough. With the Las Flores Pipeline restart approved by PHMSA, SOC’s shares have surged past $9.34, a 22.9% leap from its 52-week low. The move defies a 62% YTD decline and positions the stock at a critical inflection point. Retail sentiment on StockTwits remains 'extremely bullish,' with traders eyeing a potential $20+ rally.

Pipeline Approval Clears Regulatory Logjam
Sable Offshore’s 22.9% surge stems from the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) approving its restart plan for the Las Flores Pipeline System. This federal green light resolves a years-long legal battle with the California Coastal Commission, which had blocked the pipeline on environmental grounds. The PHMSA’s decision transfers oversight to the federal level, removing state-level permitting constraints. The pipeline’s restart is pivotal for Sable’s Santa Ynez Unit, which produces crude oil and natural gas from offshore California platforms. The regulatory victory also validates the company’s strategy to bypass state restrictions by leveraging federal jurisdiction, a move that could accelerate production and revenue.

Options Playbook: Leverage Gamma and Theta for Short-Term Gains
• 200-day average: $20.17 (well below current price)
• RSI: 71.37 (overbought territory)
• MACD: -0.13 (bullish divergence)
• Bollinger Bands: Price at 7.83 (upper band) vs. 3.31 (lower band)

With SOC trading near its 52-week high of $35 and RSI in overbought territory, the stock is primed for a continuation or consolidation phase. Key levels to watch include the 200-day SMA at $20.17 and the 30-day SMA at $5.45. The options chain reveals two high-conviction plays:

1. SOC20260102C9.5 (Call, $9.5 strike, 2026-01-02):
• IV: 129.95% (high volatility)
• Leverage Ratio: 9.67%
• Delta: 0.595 (moderate sensitivity)
• Theta: -0.057 (moderate time decay)
• Gamma: 0.176 (high sensitivity to price swings)
• Turnover: 1,028 (liquid)
This call option offers a 165.79% turnover surge, reflecting strong retail and institutional demand. Its high gamma and moderate delta make it ideal for a 5% upside scenario (targeting $9.81), where payoff would be $0.31 per share.

2. SOC20260102C10 (Call, $10 strike, 2026-01-02):
• IV: 180.28% (elevated)
• Leverage Ratio: 8.72%
• Delta: 0.534 (moderate)
• Theta: -0.071 (aggressive time decay)
• Gamma: 0.130 (high)
• Turnover: 10,860 (extremely liquid)
This contract’s 180% IV and 0.13 gamma position it as a high-conviction play for a $10.50 target. A 5% upside would yield a $0.50 payoff, aligning with analyst price targets.

Action: Aggressive bulls should prioritize SOC20260102C10 for a breakout above $10.50. Conservative traders may use SOC20260102C9.5 as a leveraged play on a $9.81 pivot. Both contracts benefit from high gamma and moderate delta, amplifying returns in a bullish continuation.

Backtest Sable Offshore Stock Performance
The backtest of SOC's performance after a 23% intraday surge from 2022 to now shows mixed results. While the stock experienced a maximum return of 5.51% on December 46, the overall win rate for 3-day, 10-day, and 30-day periods is relatively low, with returns of 0.12%, 0.93%, and 1.75%, respectively. This suggests that while there is potential for gains, the stock's performance is also subject to volatility and fluctuation.

Breakout or Bubble? Watch $10.50 and 200-Day SMA for Clarity
Sable Offshore’s pipeline approval is a regulatory win, but sustainability hinges on production ramp-up and cost management. The stock’s 22.9% surge has pushed it into overbought territory (RSI: 71.37), suggesting a near-term pullback is likely. However, the 200-day SMA at $20.17 remains a distant target, and the 52-week high of $35 offers long-term upside. Investors should monitor the $10.50 level for a breakout confirmation and the 200-day SMA for a bearish reversal. Meanwhile, sector leader RIG (Transocean) is down -0.87%, signaling mixed momentum in the oil drilling space. Act now: Buy SOC20260102C10 if $10.50 breaks, or short-term traders can scalp the $9.81 pivot with SOC20260102C9.5.